Per Justice U.L. Bhat :

Appellant, a unit or division of M/s. Steel Authority of India Ltd. (SAIL), a Government of India Undertaking is an integrated steel plant, manufacturing goods falling under Chapters 72 and 73 of Central Excise Tariff Act, 1985. Central excise duty on these goods was changed from specific rate to ad valorem rate with effect from 1.9.92. The dispute in the appeal relates to deductions claimed in price lists effective from 1.9.92. Assistant Collector issued show cause notice proposing to disallow seven deductions claimed in the price lists. Appellant resisted the notice; however, Assistant Collector disallowed the deductions. In appeal, Collector (Appeals) allowed some of the deductions claimed, but confirmed the disallowance of deductions on three counts, namely, special discount granted to sister plants of SAIL, siding and haulage charges inside the factory premises and contribution towards Joint Plant Committee (JPC cess). This order is being challenged.

2. Shri M. Ali, JDR raised an objection to the effect that appellant has not obtained clearance from the Committee of Secretaries as required by the Supreme Court. He pointed out that copy of the minutes of the meeting of the Committee produced by appellant does not relate to the present appeal. Item No. 47 in the minutes relates to an appeal filed by SAIL against -

"Order-in-Appeal No. 88/JSR/83 dated 30.12.83 regarding inclusion of (i) JPC charges, (ii) special discount allowed to sister units and (iii) Railway siding and Haulage charges in the assessable value for levy of excise duty"

The file number is stated to be FIN/1/94-I (Vol. VI). It is pointed out that this appeal has been filed against Order-in-Appeal No. 99/JSR/93 dated 30.12.93. We are satisfied that 88 and 83 referred to in the minutes are mistake for 99 and 93 respectively for several reasons. The three points in dispute referred to in the minutes are the points raised by SAIL in this appeal. According to appellant, SAIL has no other appeal in the Tribunal on these three points. The file number tallies. The dispute in this appeal has arisen in the context of the ad valorem duty which came into force with effect from 1.3.86. Therefore the year of appeal and date of disposal cannot be 83 and 30.12.83 respectively and must be 93 and 30.12.93 respectively. We therefore hold that item No. 47 of the minutes actually relates to the present appeal. The Committee has granted clearance. The objection raised on behalf of the department is overruled.

3. Special Discount : While a part of the products manufactured by the appellant are sold to independent buyers, the bulk of the products are transferred to the other integrated steel plants of SAIL and assessable value is required to be determined under Rule 6 (b) (i) of the Central Excise (Valuation) Rules, 1975 on the basis of price at which such goods are sold by the assessee or by any other manufacturer. The dispute regarding discount relates not to the part of the goods sold to independent buyers, but to the bulk of the products transferred to other units of SAIL or captively consumed by SAIL in other factories. Appellant is willing to have the assessable value determined on the basis of the price at which goods are sold by SAIL to independent buyers, though subject to special discount. According to appellant, the goods captively consumed are in such large quantities and in the normal course, for such large quantities, if sold to independent buyers, discount would be granted and therefore such discount has to be allowed. Assistant Collector rejected this contention on the ground that the appellant and sister plants are related persons, that appellant does not allow the discount as normal practice and the price at which goods are sold to independent buyers is the normal price under section 4 (1) (a) of the Central Excise Act, 1944 and hence the discount is not allowable. This finding has been confirmed by Collector (Appeals) without any independen